837.61351/2398
The Ambassador in Cuba (Messersmith) to the Secretary of State
[Received February 3.]
Sir: Supplementing my despatch No. 1486, of January 30, 1941,46 I have the honor to enclose, in strict confidence, copies of two memoranda46 presented jointly by the Hacendados Association47 and the Colonos Association48 to the Government, “clarifying” the terms under which the Associations understand the proposed financing of a special crop of 400,000 tons of sugar during 1941 will be carried out.
Particular attention is called to paragraph (c) on page two of Memorandum No. 1. The device suggested provides for the sale of a minimum amount of 50,000 tons annually in the world market, at prices higher than the financing price, if possible, or at prices lower than the financing price, if the Export-Import Bank approves. If such sale in the world market cannot be made, an equivalent amount must be sold in the United States market the following year, and the proceeds from the sale of this sugar in excess of the financing rate may be applied by the Institute to make up losses in the sale of additional sugars in the world market at less than the financing price. The proceeds of the 6¢ tax, after charges for interest and expenses have been paid, likewise would be available for making up the difference between the proceeds from sales of sugar in the world market at less than the financing price and the proceeds which would have been received if such sugar had been sold at the financing price. The result of the device suggested would be to make it possible to dispose of the special quota sugars more rapidly than otherwise possible. The Embassy believes that the suggestion has merit; and it is an interpretation of the bank’s offer to which the bank may agree without having to modify its offer.
Respectfully yours,